To deprive Iran of gasoline and force the country to come to the negotiating table regarding its nuclear program, Western nations are turning up the heat on traders who supply Tehran with oil products. While the United States is threatening to adopt a new sanctions bill, Israel is clearly preferring to use its special relations with the world’s leading trading concern, Switzerland’s Glencore, which had annual sales of SFR 165 billion in 2008, to pressure the Iranians. The group, which was long named Marc Rich + Co, has enjoyed excellent relations with Tel Aviv for nearly 40 years.

Oil Alliance. Until 2008, Glencore was one of the three leading suppliers of gasoline to Iran. But since Mahmud Ahmadinejad’s re-election in June, Glencore, which is based in Zug and run by South Africa’s Ivan Glasenberg and the German national Willy Strothotte, has gradually stopped supplying the country, leaving what is, in fact, a lucrative market to its countrymen Vitol and Trafigura. Although it doesn’t hesitate to deal with countries even more isolated than Iran, Glencore appears to have abandoned Tehran in favor of one of its oldest and most loyal customers, Israel.

Since the beginning of the current decade, Glencore has been selling Russian and Kazakh oil to the Israeli oil marketing firm Sonol Israel Ltd. The trader is also the leading customer of the oil pipeline between Eilat and Ashkelon, which it uses to carry oil from the Caucasus to Asian markets. Although Israeli law normally bans all foreign investment in oil facilities, Glencore even tried to acquire a 45% stake in 2006 in the refinery at Haifa (which produces 160,000 bpd) before being blocked by Israeli regulators two years later. Security staff at Glencore, one of the most secretive companies in a trading community little known for its openness, remains chiefly made up of former Israeli special forces and intelligence officers.

Intelligence in Return for Oil. Glencore’s links with Israel date back to 1973 when the firm was still named Marc Rich + Co. In his biography named The King of Oil (published by St. Martin’s Press ) that appeared last month in the United States, Rich lifted part of the veil on his relations with the Jewish state. Supplied with crude by the Shah in Iran, Israel allowed Marc Rich + Co in 1973, to sell some of the Iranian petroleum pumped through the pipeline between Eilat and Ashkelon on world markets. . When ayatollah Ruhollah Khomeiny broke off all ties with Tel Aviv in 1981, Rich nonetheless continued to supply Israeli with Iranian oil, selling the country between 20,000 and 40,000 bpd, or 20% of its daily needs.

When Rich was indicted by the New York district attorney Rudy Giuliani in 1983, a former Mossad officer, Avner Azoulay, became his intelligence advisor. Although an international arrest warrant was issued against him, Rich could always count on information gathered by Azoulay to help him escape from agents of the US Marshals Service who were hunting him. An elaborate trap that involved luring Rich to Moscow and having him arrested in Russia was even laid for him in 1992 through the intermediary of the Kroll company (which employed several former New York district attorneys at the time). It was foiled at the last moment thanks to Azoulay. The offices of Marc Rich + Co AG were long suspected of serving as a cover for certain Israeli intelligence operations in the Middle East. Azoulay is now director of the Marc Rich Foundation.

Intelligence Online, November 26, 2009